Riot Blockchain has invested more budget on Oklahoma City mining facility, purchased 3.000 S17-Pro Antminers from Bitmain

Cryptocurrency mining firm Riot Blockchain announced the purchase of an additional 1,000 next-generation Bitmain S17-Pro Antminers for approximately USD $1.35 million from BitmainTech PTE.LTD. (“Bitmain”) on Dec. 12. On Dec. 4, 2019, Riot announced that it had purchased 3,000 S17 Pro miners. Once these total 4,000 miners are received and operational, Riot’s Oklahoma City mining facility will utilize its 12 megawatts (“MW”) available electric power supply mining with the newest generation of S17 Pro miners. This purchase was funded from Riot’s available cash on hand.

The latest generation of Application-Specific Integrated Circuit miners from mining hardware giant Bitmain represents an approximate 50% improvement in hardware power efficiency compared to the S9 Antminers currently in use by Riot. As previously reported, Riot’s gross margin percent, computed as mining revenues in excess of the cost of revenues (exclusive of depreciation and amortization), was 14% in the three-month period ended September 30, 2019, and hopes to increase these figures when its new purchases are deployed in Q1/2020.

The company anticipates that the new miners will generate 440% of the hash rate of the S9s while consuming only 220% of the power. This upgrade will allow Riot to significantly increase its operating hash rate at the Oklahoma City mining facility with fewer total miners using the same or less total electricity. Pending future actual power costs and Bitcoin network economic conditions, it is expected that a portion of the existing S9 miners may also continue to be operational, especially during periods of low-cost electricity.

Assuming full utilization of the Oklahoma City facility’s 12-megawatt available electricity supply, and deployment of the total 4,000 new miners, Riot estimates the aggregate operating hash rate will be around 248 petahash (PH/s) per second. This would represent an estimated 240% over Riot’s present average mining hash rate. Riot anticipates that the 4,000 new miners will be deployed early in the first quarter of 2020 and are expected to represent over 90% of Oklahoma City’s mining facilities’ total current capacity.

Riot reportedly paid around $1.35 million dollars for the additional 1,000 S17-Pro Antminers or approximately $1,350 per rig. The retail price listed on the Bitmain web-store is $1401 per unit, although this is unlikely to include local sales tax.

The Board of Directors and Management of Riot are very pleased to be in a position from a financial point of view to take advantage of this exciting new technology at a time when the manufacturer has recently significantly reduced the cost of the miners. While cryptocurrency mining continues to have challenges, including price volatility of Bitcoin, the opportunity to acquire significant additional net hash rate capacity on a very cost-effective basis was determined to be compelling. The decision was further enhanced given Riot’s recent funding from its 2019 ATM Offering of common shares with no warrants or other rights and at prices appreciably higher than the current market. As previously reported, the Company’s cash and digital asset balance as of September 30, 2019, totaled $18.3 million, with no long or short-term secured debt.

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